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Tired of Waiting

New Article From Arabian Money

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New Arabian Money article:

" UK house prices slump 3.6% the fastest rate since 1983 "

" This will plunge millions of families into negative equity with the value of their homes worth less than their purchase price,

and for the banks it means that provisions against bad loans will have to rise, threatening a repeat of the 2007-8 banking crisis. "

(...)

" Moreover, the outlook is for a continued contraction. House prices are way out of line with their historic ratio to incomes in the UK. This is about three compared to the recent market high of seven, implying that more than a 50 per cent fall in house prices is required to bring house prices back into line.

Earnings growth is expected to be modest at best over then next year, while taxes are certainly on the way up from next April. This is not a formula for a rising house market.

House price party over

The UK is actually late in leaving the house price party. (...) The prospect now is for multi-year declines until the market returns to long-term average income multiples and some confidence comes back. (...) (Article continues) "

LINK: http://www.arabianmoney.net/global-economics/2010/10/07/uk-house-prices-slump-3-6-the-fastest-rate-since-1983/

Other good articles from them.

Their warning from June 2010:

" Housing an obvious investment bubble in the UK and Australia "

http://www.arabianmoney.net/global-economics/2010/06/16/housing-an-obvious-investment-bubble-in-the-uk-and-australia/

We had already a thread here about their excellent Sept 21 article:

" Panic begins to grip UK housing market as the bubble pops "

http://www.arabianmoney.net/global-economics/2010/09/21/panic-begins-to-grip-uk-housing-market-as-the-bubble-pops

Edited by Tired of Waiting

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New Arabian Money article:

" UK house prices slump 3.6% the fastest rate since 1983 "

" This will plunge millions of families into negative equity with the value of their homes worth less than their purchase price, and for the banks it means that provisions against bad loans will have to rise, threatening a repeat of the 2007-8 banking crisis. "

(...)

" Moreover, the outlook is for a continued contraction. House prices are way out of line with their historic ratio to incomes in the UK. This is about three compared to the recent market high of seven, implying that more than a 50 per cent fall in house prices is required to bring house prices back into line.

Earnings growth is expected to be modest at best over then next year, while taxes are certainly on the way up from next April. This is not a formula for a rising house market.

House price party over

The UK is actually late in leaving the house price party. ... (Article continues) "

LINK: http://www.arabianmoney.net/global-economics/2010/10/07/uk-house-prices-slump-3-6-the-fastest-rate-since-1983/

___________________________________

Their warning from June 2010:

" Housing an obvious investment bubble in the UK and Australia "

http://www.arabianmoney.net/global-economics/2010/06/16/housing-an-obvious-investment-bubble-in-the-uk-and-australia/

We had already a thread here about their excellent Sept 21 article:

" Panic begins to grip UK housing market as the bubble pops "

http://www.arabianmoney.net/global-economics/2010/09/21/panic-begins-to-grip-uk-housing-market-as-the-bubble-pops

Brilliant. Anything to put off the foreign investors that have the VIs rubbing their hands in glee.

Don't suppose it's confined to the UK, but hearing people going all euphoric about foreigners pricing out natives makes me want to murder somebody.

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Brilliant. Anything to put off the foreign investors that have the VIs rubbing their hands in glee.

Don't suppose it's confined to the UK, but hearing people going all euphoric about foreigners pricing out natives makes me want to murder somebody.

It is a good article. Anything that reduces demand is a positive thing.

Though I think foreign buyers influence only the "Prime London" market, and have a very small "trickle down effect" on cheaper properties. Our housing crisis is home made. It was our own fault. Labour's fault, for allowing the credit (mortgage) bubble, boosting effective demand, and on the supply side keeping planning permits so restrict. The HPI was then inevitable really.

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New Arabian Money article:

" UK house prices slump 3.6% the fastest rate since 1983 "

" This will plunge millions of families into negative equity with the value of their homes worth less than their purchase price, and for the banks it means that provisions against bad loans will have to rise, threatening a repeat of the 2007-8 banking crisis. "

(...)

" Moreover, the outlook is for a continued contraction. House prices are way out of line with their historic ratio to incomes in the UK. This is about three compared to the recent market high of seven, implying that more than a 50 per cent fall in house prices is required to bring house prices back into line.

Earnings growth is expected to be modest at best over then next year, while taxes are certainly on the way up from next April. This is not a formula for a rising house market.

House price party over

The UK is actually late in leaving the house price party. ... (Article continues) "

LINK: http://www.arabianmo...ate-since-1983/

___________________________________

Their warning from June 2010:

" Housing an obvious investment bubble in the UK and Australia "

http://www.arabianmo...-and-australia/

We had already a thread here about their excellent Sept 21 article:

" Panic begins to grip UK housing market as the bubble pops "

http://www.arabianmo...the-bubble-pops

haha

it seems that Arabs know more about the UK property market than locals .... bizarre ... ???

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haha

it seems that Arabs know more about the UK property market than locals .... bizarre ... ???

Exactly! I am seriously p!ssed off with our fecking press. :( The fecking stupid b@stards VI morons!

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Exactly! I am seriously p!ssed off with our fecking press. :( The fecking stupid b@stards VI morons!

Indeed!

I have never read on BBC that for example if the BOE and Labour gov. put interest rates to 10% in 2003 we would NEVER HAVE the disaster of 2007 ...

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Indeed!

I have never read on BBC that for example if the BOE and Labour gov. put interest rates to 10% in 2003 we would NEVER HAVE the disaster of 2007 ...

You wouldn't need anything close to 10%. See, if annual interest go from, say 5% to 6% per year, that is an increase of 20%! I mean, the interest part of monthly mortgage payments would increase by 20% (on a interest only mortgage, and a bit less if you consider repayments too). Since most UK house buyers get the biggest mortgage they can afford - on a monthly bases, an increase of 20% would reduce their "purchasing power" by almost 20%! That would reduce the HP peak by almost 20%.

Just 1%/year more, would reduce the peak by a lot! 2%/year more would probably have been enough to abort most of the bubble. The BoE and the FSA have the necessary data to set the right increase. But I doubt that it would have to be anything near 3% more per year (between 2003 and 2007).

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  • 153 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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